Modelling and analysis of business process reengineering

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					int. j. prod. res., 2002, vol. 40, no. 11, 2521±2546




Modelling and analysis of business process reengineering

               A. GUNASEKARAN{* and B. KOBU{

               Business process design and business process reengineering (BPR) depend
               crucially on linking production procedures and organizational services to business
               goals and objectives. There is currently very little formula support for this kind of
               reasoning as analytical tasks are usually carried out informally and individual
               design decisions are hard to relate to business objectives. If BPR is carried out
               without understanding the way it is done, then the most likely outcome would be
               continuing less-than-satisfactory current practice and automating outdated pro-
               cesses. This kind of practice misses opportunities for innovation and rationaliza-
               tion. The modelling and analysis of business processes along with business
               strategies and organizational structures are essential to study the implications
               of BPR. In this paper, an attempt has been made to study the modelling, analysis
               and tools/techniques used for modelling of BPR with the help of a survey on the
               recently (1993±2000) employed methods and tools used for BPR modelling and
               analysis. A framework for modelling and analysis, and guidelines for the selection
               of tools/techniques of business process reengineering are presented.




Acronyms
          ABA            Activity Based Analysis
         ABM             Activity Based Management
          AHP            Analytical Hierarchical Process
            AI           Arti®cial Intelligence
       ARENA             Name of a Commercial Simulation Software System
         ATM             Asynchronous Transfer Mode
          BPR            Business Process Reengineering
     CAD/CAM             Computer-Aided Design
          CAE            Computer-Aided Engineering
         CAM             Computer-Aided Manufacturin g
         CASE            Computer-Aided Systems Engineering
          CBR            Case Based Reengineering
      CD-ROM             Compact Disc ± Read Only Memory
            CE           Concurrent Engineering
          CIM            Computer Integrated Manufacturing
      ConGolog           A process speci®cation language
          DEA            Data Envelopment Analysis
           DM            Database Management
          DSS            Decision Support Systems

   Revision received November 2001.
   { Department of Management, Charlton College of Business, University of Massachusetts
Dartmouth, North Dartmouth, MA 02747, USA.
   * To whom correspondence should be addressed. e-mail: agunasekaran@umassd.edu

International Journal of Production Research ISSN 0020±7543 print/ISSN 1366±588X online # 2002 Taylor & Francis Ltd
                                             http://www.tandf.co.uk/journals
                                            DOI: 10.1080/00207540210132733
2522                       A. Gunasekaran and B. Kobu

     E-commerce    Electronic Commerce
             EC    Electronic Commerce
            ECS    Embedded Computer Systems
              ES   Expert Systems
            EDI    Electronic Data Interchange
         EFQM      European Forum for Quality Management
            EFT    Electronic Fund Transfer
            ERP    Enterprise Resource Planning
           GMI     General Motors Institute
             HR    Human Resources
          HPM      Hierarchical Process Modelling
           IBRS    Intelligent Bank Reengineering System
         IBPRS     Intelligent Business Process Reengineering System
         IDEF0     Integration De®nition Modelling
              IS   Information Systems
          ISDN     International Switching Digital Networks
              IT   Information Technology
              LP   Lean Production
            MEI    Minimum Essential Information
           MRP     Material Requirements Planning
         MRPII     Manufacturing Resource Planning
         OTPM      Object Transformation Process Model
            OTS    Order-To-Ship
     PERT/CPM      Program Evaluation Review Technique/Critical Path Method
            PFA    Process Flow Analysis
             PM    Process Mapping
           QFD     Quality Function Deployment
          RCM      Reliability Centre Maintenance
           SCM     Supply Chain Management
            SFT    Sales Force Transformation
          TASC     Information Management and Systems Engineering Solutions
                   Firm
         TELOS     Knowledge based representation language
            TBC    Time Based Competition
           TPM     Total Productive Maintenance
           TQM     Total Quality Management
           TOC     Theory of Constraints
          WWW      World Wide Web


1.  Introduction
    Business Process Reengineering (BPR) concerns the fundamental rethinking and
radical redesign of a business process to obtain dramatic and sustained improve-
ments in quality, cost, service, lead time, ¯exibility and innovation. BPR focuses on
the whole processÐstarting from product conceptual stage to ®nal product design. It
provides the opportunity to reengineer the process or to reduce radically the number
of activities it takes to carry out a process with the help of advanced Information
Technology (IT), (Hammer 1990, Hammer and Champy 1993, Peppard and
Rowland 1995). New developments in IT, such as multimedia, image processing
                            Business process reengineering                         2523

and expert systems, can be used to reduce the number of non-value added activities.
Organizational restructuring including job redesign can be used to improve the
delivery of goods and services.
    A group of related tasks that together create value for a customer is called a
business process. Common corporate goals include: (a) customer satisfaction,
(b) return on investment, and (c) market share (Hales and Savoie 1994, Hewitt
1995). These goals require process inter-dependencies and system dependencies
that are established through the integration of various business processes. Another
de®nition of a business process is the type of commodity that ¯ows through the
system. For example, a product development and its transformation into a ®nal
product can be viewed as a process. Davenport and Short (1990) de®ne `process’
as a set of logically related tasks performed to achieve a de®ned business outcome
and suggest that processes can be divided into those that are operationally oriented
(those related to the product and customer) and management oriented (those that
deal with obtaining and coordinating resources). Love et al. (1998) consider the
technical and social dimension of a process and identify four enablers: quality man-
agement, technology, information and people.
    Radical process change is the ®rst major step in BPR. Therefore, a process
improvement team should be established with the objectives of analysing the
whole process, identifying non-value-adde d activities such as storage and inspection,
and eliminating them. The delivery process emphasizes cross-functional performance
rather than encouraging departmental optimization and consequently system-wide
sub-optimization . Sage (1995) de®nes three levels of BPR: product, process and
system.
    Business process and enterprise activity modelling play a central role in enterprise
representation in the context of Computer-Integrate d Manufacturin g (CIM) and
integration. Business processes determine enterprise behaviour while the activities
characterize functionality. Vernadat (1996) discussed a formalism to specify business
processes and enterprise activities. The formalism makes use of behavioural rules
derived from process algebra for structured processes and temporal logic for semi-
structured processes. The paradigm assumes that human or non-human agents
(functional entities), performing elementary actions (functional operations) execute
processes and their activities.
    The role of IT in reengineering can be viewed from two perspectives: (i) the role
of the IT function (e.g. Internet, E-Commerce, Multimedia, EDI, CAD/CAM, and
ISDN), and (ii) the role of the technologies themselves (e.g. CD-ROM, ATM, and
®bre optics). IT has played a vital role in the success of the overall reengineering
initiative. Information management throughout the company should be encouraged
to develop skills in computer-aide d systems engineering (Davenport and Short 1990,
Hewitt 1995, Gunasekaran and Nath 1997). Soliman and Youssef (1998) claim that
the success of BPR relies on the use of IT and they also identify the characteristics of
successful BPR. In a more recent Australian survey, 75% of 535 ®rms identi®ed IT
as the most important enabler in BPR (O’Neill and Sohal 1998). There are many
articles available in the literature on IT in BPR (Hansen 1997, Davies 1994, Bradley
et al. 1995, Swami 1995, Giaglis and Paul 1996, Love et al. 1998). However, most of
the studies deal with conceptual frameworks and strategies and do not deal with
modelling and analysis of business processes, with the objective of improving the
performance of reengineering e orts.
2524                          A. Gunasekaran and B. Kobu

     Modelling of BPR is intended to represent the information and the information
¯ows in an organization with the idea of abstraction, through the use of tools such
as conceptual framework, mathematical models and simulation. The purpose of
modelling BPR is to understand the problems and to recognize the constraints
with the information and material ¯ows and to seek optimal solutions for improving
the overall performance of the system. Im et al. (1999) developed a model to explain
the relationship between BPR tools and the determinant of success. Analysis of 83
BPR practitioners’ responses from di erent industries indicated that (a) BPR tools’
competencies are linked to their e ectiveness rather than their e ciency, and (b)
BPR tools’ competencies are strongly related to the success of BPR project.
     The main objectives of the paper are to: (a) understand the various de®nitions of
BPR; (b) study the roles of modelling and analysis as enablers of BPR; (c) review the
literature available on BPR; (d) classify the tools and techniques based on the nature
of the applications and characteristics of the tools/techniques of BPR; (e) develop a
framework for identifying and selecting the most appropriate tools/techniques for
reengineering business processes; and (f) suggest some future research directions to
improve the modelling and analysis of BPR in the wake of advanced IT.
     Realizing the importance of modelling and analysis of BPR, an attempt has been
made in this paper to understand ®rst the role of modelling of BPR and then to study
the various tools used for modelling and analysis of reengineering e orts. Finally, a
framework has been presented for modelling and analysis of a BPR.

2.   Business process reengineering
    The keywords for BPR are `fundamental’, `radical’, `dramatic’, `change’ and
`process’. A business process has to undergo fundamental changes to improve pro-
ductivity and quality. Radical changes, as opposed to incremental changes, are made
to create dramatic improvements. Reengineering is not about ®ne-tuning or
marginal changes. It is for ambitious companies that are willing to make substantial
changes to achieve signi®cant performance improvements.
    Chan and Peel (1998) conducted a survey of 37 companies in 17 di erent indus-
tries to investigate the causes and the impact of BPR. They concluded that the
primary reasons for BPR are increasing e ciency (internal) and improving customer
service (external). Francis and McIntosh (1997) identi®ed causes for the emergence
of BPR such as consumers, competition (global), technological development, and IT.
Most companies are function- or department-oriented , and not process-oriented.
Often, many people are involved in order ful®lment, but no one tracks a product
and reports the status of an order directly. Reengineering makes one individual
responsible for the complete business process (Self 1995). In another study, the
success of BPR is related to the creativity of the people in the organization (Paper
1997). Some of the factors that will prevent reengineering and hence innovation and
growth are: (i) correcting the process instead of changing it; (ii) loss of nerve; (iii) the
barons; (iv) change of company champion; (v) settling for minor results; (vi) culture,
attitudes and skill base; (vii) skimping on resources; and (viii) pulling back when
people resist change.
    BPR is a structured approach to analysing and continually improving funda-
mental activities such as manufacturing , marketing, communications and other
major elements of a company’s operation (Elzinga et al. 1995). Wright and Yu
(1998) de®ned the factors to be considered before actual BPR starts and developed
a model for identifying the tools for BPR. Childe et al. (1994) have presented frame-
                            Business process reengineering                         2525

works for BPR that focus upon the sequence of activities that form business pro-
cesses. They attempted to develop a framework for understanding BPR and to
explain the relationship between BPR and TQM, TBC and IT. BPR should enable
®rms to model and analyse the processes that support products and services, high-
light opportunities for both radical and incremental business improvements through
the identi®cation and removal of waste and ine ciency, and implement improve-
ments through a combination of IT and good working practices.
    A conceptual model explaining the major components of BPR is shown in ®gure
1. This model demonstrates the link between organizational restructuring and beha-
vioural changes with the help of Information Technology for reengineering business
processes, and hence e ective process delivery systems, with the objective of improv-
ing customer satisfaction.
    BPR requires organizationa l restructuring (include the facility location, capacity,
types of products, technology, people) and changes in employees’ behaviour (train-
ing, education, job enrichment, job enlargement, and employee empowerment) with
a view to accommodating and facilitating radical changes for achieving dramatic
improvements in business performance. IT, such as the Internet, E-Commerce,
CAD/CAM, CIM, MRP, Multimedia, ERP and WWW, EDI and EFT, would
help to restructure an organization and promote changes with acceptance from




          Organizational                                          Behavioral
           Structuring                                             Changes



                                      Information
                                      Technology




                                             Process
                                    Business Business
                                     Reengineering




                              Process Delivery Systems



                             Improved Customer Service
                                       Level

                        Figure 1.   A conceptual model for BPR.
2526                        A. Gunasekaran and B. Kobu

employees on any radical changes in the company. The reengineering of a business
process will result in improved process delivery systems and hence an improved
customer service level.
    Organizational restructuring by standardization and simpli®cation eliminates
barriers for a smooth ¯ow of information and materials along the supply chains.
The smooth ¯ow of information can be facilitated by the use of various ITs to
improve the integration of various functional areas. The basic aim of BPR is to
deliver quality goods at competitive prices in a timely fashion. Therefore, a manu-
facturing system as well as a business organization should be modi®ed emphasizing
coordination of the basic business processes in the chain, from suppliers to customers,
as opposed to the existing complex structures of the functional hierarchies. The
behavioural changes should precede the reengineering. Therefore, issues such as
training and education, employee empowerment, teamwork and incentive schemes
should be given priority in BPR.
    In order to reengineer a business process, both internal and external process
capabilities, such as product development, production, distribution, suppliers and
markets, and inter-organizationa l relationships, especially in a global manufacturing
environment, need to be integrated. Reengineering helps to achieve lean production
through the integration of production activities into self-contained units along the
production ¯ow. IT is an important element in such integration. Wyatt and Kletke
(1997) presented a descriptive model to illustrate the impact of telecommunication
technology on BPR. The techniques, such as time-based analysis, systems reengineer-
ing tools and IT can be applied to supply chain management as well as to the
customer administration cycle (order taking to cash collection), product design
cycle (concept de®nition to product availability), human resource development
cycle (skills need identi®cation to training completion), and virtually every other
process within an organization, The appropriate handling of the human motivational
reactions to change is unquestionably as important in the successful introduction of
radically new methods as are the technical aspects of process design (Gunasekaran
and Nath 1997). Al-Essa et al. (1996) discuss the critical roles of IT in development
and operations stages in BPR. Mahapatr a and Lai (1996) explored the similarities
between IT-enabled BPR and the competitive use of IT, and argued that BPR
extends the competitive use of IT to all levels in an organization.
    Collins and Reynolds (1995) presented the experience of Microsoft Ireland’s
reengineering programme and explained how to solve inventory problems e ectively.
The company has solved the inventory problems in supply-chain by using online
stock control with advanced IT. Kenlaw (1995) explained how IBM’s Sales Force
Transformation (SFT) unit provides provisional services to Fortune 2000 customers
seeking to automate sales and marketing functions. Increasingly, sales managers are
looking for an integrated system that links front-end departments to manufacturing
resource planning and enterprise resource planning systems. Through time-based
selling, IBM has developed a system to eliminate paper or and avoid duplication
of order-entry procedures with the objective of increasing the accuracy of those
orders and streamlining contract writing and signing. Altinkemer et al. (1998) dis-
cussed how BPR would help to improve productivity and hence organizational
excellence. In a survey of 37 companies in 17 di erent industries, it was concluded
that the primary reasons for BPR are increased e ciency (internal) and improved
customer service (external), (Chan and Peel 1998). All these examples imply that
                            Business process reengineering                         2527

BPR has the scope for applications in manufacturing /service organizations and that
IT is an integral part of BPR.
     According to Self (1995), there are three things a manufacturing company needs
to do to be able to compete e ectively: (i) o er an e cient and well automated
manufacturing system that is capable of giving the company an advantage over
competitors; (ii) provide a coordinated method of meeting the order-winning criteria;
and (iii) reengineer the company’s process in such a way that the product meets
order-winning criteria and maximizes pro®t. This area has the potential for future
research and applications. Many believe that technology transfer, in the form of
automation, is the sole answer to business problems. Nevertheless, automation
does get some jobs done faster, but no dramatic improvement in performance results
without fundamental or radical process changes. Therefore, radical improvements
through factory innovation have more to do with a company’s ability to change its
processes than simply automating (Hammer and Champy 1993, Veasey 1994). BPR
requires altering of company’s in-house procedures and practices, which is an essen-
tial prerequisite to e ective innovation and growth. More often, a change in the
industrial culture and infrastructure should be necessary before investment in new
plant can take e ect.
     BPR is a top-down, process-driven approach managed by senior executives,
which aims to improve the performance by radical changes in the system over the
short term (Ardhaldjian and Fahner 1994). Companies usually have to meet three
important goals to achieve e ectiveness: (i) a process, not product perspective, (ii)
cross-functiona l coordination or integration, and (iii) consistency between goals and
improvement plans (Wickens 1995, Jones et al. 1997, Lockamy and Smith 1997). IT
is an enabler to the reengineered process, and any reengineering programme must
consider the tremendous advantag e o ered by technologies such as document image
processing and expert systems (Childe et al. 1994, Morris and Brandon 1993).
     The successful implementation of BPR for a radical change in manufacturing
strategy requires a change in attitude and the serious involvement of dedicated indi-
viduals and teams (Roby 1995). Smith (1995) indicates that a major aspect of BPR is
the human element. Therefore, companies should ensure that their employees are
suitably motivated and the technology required for training is available, especially
for radical change for BPR. In earlier studies, Hall et al. (1994) de®ned three critical
determinants of successful BPR projects. Maull et al. (1995) conducted a survey of
25 UK companies in order to determine the critical success factors for BPR. Teng
(1996) developed a model for strategic perspectives on BPR to enable organizational
changes including process changes. Guimaraes et al. (1997) tested eight Expert
Systems (ES) success factors in terms of their importance to BPR. Paper (1997)
presented a case study conducted in Caterpillar where he adheres to a systematic
methodology and insists on creativity training, process simpli®cation and improve-
ment. Elahee and Gupta (1998) discussed six major success factors for BPR. Yoon et
al. (1998) presented eight success factors for expert systems used in BPR. Larsen and
Myers (1999) discussed a BPR project in a ®nancial service ®rm that involves the
implementation of ERP software and they de®ned the success of a BPR project as a
moving target, since initial success in the case turned into failure in the long term.
     The concepts of time-based competition (TBC) and lean production (LP) are of
considerable signi®cance to BPR. TBC is process based and aims to reduce radically
the time required for the entire process. The corresponding bene®ts may include
increased productivity, price competitiveness , reduced risks and increased market
2528                        A. Gunasekaran and B. Kobu

share. In the 1980s, Total Quality Management (TQM) helped incremental process
improvements in manufacturing/service organizations, but in the 1990s it was
replaced by BPR using advanced IT. This implies a role for IT and BPR in improv-
ing the e ectiveness of organizations (Childe et al. 1994, Steinberger 1994).
    Jones (1995) explained how benchmarking helps to identify and eliminate non-
value-adde d work. Benchmarking is a popular technique that a company can use to
compare its performance with other best-in-class performing companies in similar
industries. Combining benchmarking and reengineering ensures that the best prac-
tices are in use and helps a ®rm seek out and eliminate steps that waste resources.
Soliman and Youssef (1998) discussed the implications of TQM and learning organ-
ization on BPR. Their study attempted to determine the minimum BPR costs by
seeking the optimal process mapping (PM). Radical changes required by BPR can be
achieved by an information system that has to be restructured to support process
reengineering. The restructuring of an information system should support functional
integration to improve supply chain management and hence improve productivity
and quality.
    Crowe et al. (1997), after studying ®ve US electronics ®rms, argued that choosing
the right BPR project reduces the risk of failure. Two-thirds of BPR projects fail due
to lack of poor planning. Kallio et al. (1999) studied 32 BPR projects and found that
most projects were focused on streamlining current business processes, while only in
a few cases were business processes radically redesigned. Based on the results, they
developed a framework to help managers choose the most appropriate BPR strate-
gies. In the following section, some of the advanced models are described before their
application in BPR are studied. Hipkin and De Cock (2000) analysed four postulates
relating to the implementation of new maintenance systems in four organizations
and attempted to establish a set of critical success factors in Reliability Centre
Maintenance (RCM) and Total Productive Maintenance (TPM) implementation,
and to provide some guidelines for their adoption. Humphreys et al. (2000) applied
Maister’s Professional Service Firm Model in an operational manner with the objec-
tive of identifying the roles and responsibilities of the purchasing function within an
aerospace company and concluded that sta development must be a central theme
for the success of BPR.


3.   Previous research on modelling and analysis of BPR
    Modelling is an essential step in studying the current and proposed structure of
business processes from a systems perspective. One of the earlier studies evaluates
modelling tools for BPR and introduces modelling techniques and an evaluation
procedure for selecting appropriate tools (Tseng and Chen 1995, Kim 1997).
O’Neill and Sohal (1999) review the literature covering 1980-1998 . They classi®ed
the literature based on the nature of BPR tools that incorporate: process visualiza-
tion, process mapping, change management, benchmarking, and process and custo-
mer focus. An attempt has been made here to review the literature on modelling
techniques and analysis used in BPR. Table 1 presents the review of the most recent
(1993±2000) literature on BPR modelling tools and techniques. The classi®cation of
the literature on modelling and analysis of BPR is based on the major tools/tech-
niques used that include: (i) conceptual models, (ii) simulation models, (iii) object-
oriented models, (iv) integration de®nition (IDEF) models, (v) network models, and
(vi) knowledge-based models. Table 2 summarizes the tools used in BPR. It can be
                               Business process reengineering                             2529

Field of application               Techniques/Tools used        Author(s)

Manufacturing systems design       Conceptual models and        Manley (1993)
                                   object transformation
                                   process model(OTPM)
Manufacturing systems design       Simulation                   Mujtaba (1994)
Reengineering hospital             Conceptual models            Strasen (1994)
operations
Design of manufacturing            IDEF models                  Kusiak et al. (1994)
systems
Accounting database systems        Object-based and             Chen et al. (1995)
                                   knowledge-based models
Cooperative supported work         Conceptual models            Yu and Mylopoulos (1995)
                                   (Strategic Actor
                                   Relationships)
Enterprise applications            Simulation                   Meinhardt (1995)
Enterprise applications            Simulation                   Drury and Laughery (1995)
General business process           Conceptual models            Kelleher (1995)
Military community hospitals       Conceptual medical group     McGee and Hudak (1995)
                                   practice models
Reengineering of software          Simulation models            Wilkening et al. (1995)
(US Air Force)
Aircraft manufacturing             Knowledge based systems      Xia (1995)
                                   (DSS)
Decision support systems           IDEF and QFD                 Sarkis and Liles (1995)
Automated query formulation        Logical schemas              Semmel and Winkler (1995)
capabilities                       (Conceptual Constructs)
Redesigned human resources         Conceptual models            Kesler (1995)
HR function
Enterprise integration in a        Objected-oriented models     Rolstadas (1995)
competitive manufacturing
Car dealer credit operations       Computer simulation          Cvetkovski et el. (1996)
Senior management decision on      Object transformation        Manley (1996)
Product/Service portfolio          Process model (OTPM),
                                   Embedded Computer
                                   System (ECS)
Manufacturing database             Simulation                   Pugh (1996)
Net product development in         Conceptual models            Malhotra et al. (1996)
semiconductor and
telecommunication industries
Manufacturing business             Conceptual organizational    Thomas and Davies (1996)
structure                          and information ¯ow
                                   models
General reengineering process      Petri-net-based approach     Van der Aalst and Vanhee
                                                                (1996)
Business reengineering             Generic model using          Jarzebek and Link (1996)
                                   meta-case techniques
Claims processing                  AI models and techniques     Yu and Mylopoulos (1996)
Reducing order processing time     ABC analysis                 Huttner and Kernler (1996)
Radio infrastructure               European foundation for      Bowden (1996)
                                   quality management
                                   (EFQM model)
Organizational structure           Conceptual models            Teng et al. (1996)
                                   (process recon®guration)
Manufacturing process and          Simulation                   Lyu (1996)
labour productivity
                                                                                   (continued)
2530                             A. Gunasekaran and B. Kobu

Field of application                   Techniques/Tools used         Author(s)

Automation of information              Object ¯ow model and          Hsu and Kleissner (1996)
¯ow between people and groups          simulation
Intelligent bank reengineering         Knowledge-based system        Min et al. (1996)
system                                 using IDEF
Work ¯ow management                    Work ¯ow reengineering        Sharon et al. (1997)
                                       methodology
Cash register, utility, postal         Simulation                    Hunt et al. (1997)
service
Selection of BPR strategies            Decision support system       Crowe et al. (1997)
and technologies
Manufacturing                          Project management            Narasimhan and Jayaram
                                       techniques                    (1997)
Hospital ward ordering                 Soft system methodology       Chan and Choi (1997)
                                       (SSM)
General BPR                            Information technology        Wyatt and Kletke (1997)
Business process modelling             Object-oriented models        Wang (1997)
Engineering design process             Object-oriented models        Wright and Yu (1998)
Supply chain                           Simulation                    Cho et al. (1998)
Financial services                     Information technology        Larsen and Myers (1999)
                                       (ERP)
Printing o ce                          Object-oriented model         Volkner and Werners (2000)
                                                                       È
Empirical analysis                     IS network models             Bhatt and Stump (2001)

Table 1Ðconcluded.      A review of BPR modelling techniques developed/applied in recent
                                     years (1993±2000).




                                 Percentage of
Techniques/Tools used            articles surveyed   Major characteristics of techniques/tools

Conceptual models                14=45 ˆ 31:1        Easy to understand by the `end-users’, total
                                                     systems modelling, aggregate models with
                                                     less accuracy
Simulation models                11=45 ˆ 24:4        More accurate modelling, restricted in its
                                                     modelling capability, di cult to model the
                                                     strategic implication of BPR
Object-oriented models            7=45 ˆ 15:6        Di cult to understand by the end-users,
                                                     restricted to a part of the total system,
                                                     possibility of self-modelling, di cult to
                                                     consider strategic implications
IDEF models                       6=45 ˆ 13:3        Easy to understand, has the advantages of
                                                     modelling the whole system, does not
                                                     include the strategic implications
Network models                    4=45 ˆ 8:88        More accurate modelling, taking
                                                     uncertainty in the system, limited in its
                                                     modelling capability, less user-friendly
Knowledge-based models            3=45 ˆ 6:66        Intelligence systems, user-friendly, limited
                                                     in its applications

       Table 2.   Summary of tools/techniques used in modelling and analysis of BPR.
                            Business process reengineering                        2531

observed that the conceptual and simulation models have been widely used in reen-
gineering business processes.
    The overview of the recent literature on BPR modelling and analysis is presented
with the following objectives: (i) identify various tools available (ii) provide guide-
lines for the selection of appropriate tools based on the nature of BPR and corre-
sponding areas, and (iii) suggest some future research directions.

3.1. Conceptual models
    The conceptual models have been widely employed to understand the concept of
BPR and its major enablers. Powell (1994) has developed a conceptual model and a
framework for highlighting the role of IT in reengineering. This includes how IT can
improve the reengineering of a business process in a more generic term. However, a
more speci®c framework for the use of appropriate IT for reengineering various
areas of business organizations is required. For this, ®rst there is a need to de®ne
a business process that adds value to customers and, next, select a suitable IT for
reengineering.
    As information systems are increasingly expected to work with humans coopera-
tively in complex organizationa l contexts, conceptual modelling techniques need to
be extended to relate information structures and processes to business and organiza-
tional objectives. Yu and Mylopoulos (1995) proposed a framework that focuses on
the modelling of strategic business processes in their organizational settings.
Organizations are viewed as being made up of social actors who are intentionalÐ
have motivations, wants, and beliefsÐand strategicÐthey evaluate their relation-
ships to each other in terms of opportunities and vulnerabilities. The framework
supports formal modelling of the network of dependency relationships among actors
and the systematic exploration and assessment of alternative process designs in
reengineering. The semantics of the modelling concepts are axiomatically character-
ized. By embedding the framework in the Telos, a knowledge representation lan-
guage, the framework can also potentially serve as an early-requirements phase tool
in a comprehensive information system development environment.
    Large information systems often require the fusion of multiple databases to
achieve desired functionality. Semmel and Winkler (1995) focused on how auto-
mated query formulation capabilities may be realized over a set of fused databases.
Kesler (1995) presented a model and a detailed process for redesigning human
resources (HR) functions by contracting with line executives for new roles and by
upgrading the competencies of the human resource management sta while reengi-
neering the HR delivery systems.
    Strasen (1994) discussed some of the problems and shortcomings of the process
used by many outside consultants to assist hospitals in reengineering their opera-
tions. The author calls this process the `form follows function’ process because
employees are involved extensively in redesigning job tasks (functions), which in
turn change the organization’s structure, positions and reporting relationships
(forms). The process resulted in documented quanti®able improvements in enhanced
quality, service and ®nancial outcomes in the ®rst year of implementation.
    Many business-modelling methods do not lead to a precise enough model of the
underlying business knowledge. Therefore, a model should be comprehensive
enough to allow for a systematic study and precise formulation of the BPR. It
should also provide a framework for designing tools to support BPR projects.
Jarzabek and Ling (1996) identify information requirements for reengineering
2532                         A. Gunasekaran and B. Kobu

based on the commonly used methods and case studies published in the literature.
They achieved a required level of tool ¯exibility by applying meta-CASE techniques
and derived the physical schema for the tool repository and generated customized
tools from the business model speci®cations.
    Many organizations have realized how important it is to reduce the product
development cycle time with the objective of improving ¯exibility. The ¯exibility
to adapt to changing market needs and to develop innovative products in such an
environment is essential for success. This would make new product development
arguably one of the most critical cross-functiona l processes. Traditionally, this pro-
cess has involved ine cient sequential processing of information and plans between
functional specialities. Using tools/techniques such as Quality Function Deployment
(QFD) and strategies such as Concurrent Engineering (CE) could overcome this.
Malhotra et al. (1996) proposed a conceptual framework that facilitates innovation,
¯exibility, and an understanding of reengineering of the product development plan-
ning process. The framework was then re®ned and ®nally presented based on feed-
back from ®ve experts in the high technology electronics industry, and it was also
evaluated in the context of prescriptive literature on reengineering and innovation
areas.
    Successful BPR e orts in many ®rms have been reported to improve productivity
signi®cantly and to reduce sta . However, as the reality of large-scale process change
sets in and reengineering failures start coming to the forefront, more careful thought
must be given to the change process itself and it is important that senior leaders in
the organization develop a high-level strategic perspective on this multifaceted
change phenomenon. To help develop this perspective, Teng et al. (1996) developed
a process recon®guration model and a framework of organizationa l change in BPR.
The process recon®guration model shows how various functional activities involved
in a business process may be recon®gured through a reengineering initiative. Kim
and Kim (1998) proposed a form-based approach for large-scale process reverse
engineering. Van Rensburg (1998) introduced a framework for the business process
management concept as a holistic engineered description to be used in larger orga-
nizations.
    From analysing the literature on conceptual models, one can observe that most
are focused on strategies and methods for reengineering. In addition, conceptual
models are much broader in their approach and deal with information ¯ow and
human resource management. In most conceptual models, the systems approach
has been used in modelling BPR.


3.2. Simulation models
    Computer simulation is becoming a common tool in the engineer’s toolkit, but
the move to simulation is slow in coming. There are still many people in manu-
facturing, health care, BPR and human factors ®elds who are not using any sort of
simulation software and see no advantage to using this powerful tool. Even in the
information age of the 1990s it is still hard for the potential user of simulation to ®nd
the necessary facts to keep up with the changing market of computers and simulation
software (Drury and Laughery 1995).
    Dynamic process models a ord the analysis of alternative process scenarios
through simulation by providing quantitative process metrics such as cost, cycle
time, serviceability and resource utilization. These metrics form the basis for evalu-
                           Business process reengineering                        2533

ating alternatives and selecting the most promising scenario for implementation
(Levas et al. 1995).
    Many companies are confronting the problem of reorganizing the organizational
structure and processes and installing the state of the art information technologies.
The adequate design of business processes plays an essential role in dealing with this
problem and in reaching the business goals of conversion. Meinhardt (1995)
described the starting point for a business-process-oriente d introduction of o -the-
shelf software in three separate sections: requirement analysis, software implementa-
tion and system maintenance.
    The United States Air Force’s Wright Laboratory and TASC, an information
technology ®rm, developed an environment for reengineering software from one
language to another. The approach by Wilkening et al. (1995) reengineers a program
in the new language by reusing portions of the original implementation and design.
They use reverse engineering to facilitate understanding , design recovery, viewing,
and navigating of the subject system.
    An experiment was conducted in the Management Department at General
Motors Institute (GMI), which involved teaching management concepts by creating
business models. An important part of this e ort is the development of student
projects taken from their cooperative experiences. One of these projects is the Car
Dealership Credit Operations model. The paper by Cvetkovski et al. (1996)
described how these operations were modelled using ARENA, a software system,
as a class project. Pugh (1996) used a simulation model to evaluate the performance
and integrity of a replacement manufacturing database, along with validation tests
performed prior to acceptance and implementation.
    Kaizen and automation are two di erent approaches to improve the performance
of manufacturers. Both approaches have been widely discussed and reported in
related literature. Lyu (1996) proposed a framework to integrate kaizen and auto-
mation in reengineering a manufacturing process. This study concluded that using an
animated simulation model is an important step during process redesign. It is shown
that nearly 50% improvement in labour productivity is possible with the streamlined
manufacturing process.
    Simulation provides a structured environment in which one can understand,
analyse, and improve business processes. Hunt et al. (1997) looked at three busi-
nesses that have found simulation is instrumental in their pursuit of perfection: the
US Postal Service, National Cash Register, and a diversi®ed energy corporation. The
results were improved productivity and quality of services to customers. Cho et al.
(1998) suggested a methodology for business process simulation modelling, using
Visual C‡‡, to develop simulation models systematically, and an analysis based on
the concept of roles and customer±supplier relationships.
    Computer simulation models have generally been used at operational level BPR.
The simulation models have helped to model the system with the objective of iden-
tifying non-value and value adding activities. Subsequently, changes can be made to
the system for eliminating non-value-addin g activities with the objective of creating
wealth to customers. However, analytical models (mostly mathematical) have not
received due attention in BPR. Nevertheless, they have a greater role to play in
measuring performance and in conducting experiments by suitably modelling the
whole operational system and they are less time consuming. This area needs further
development. In addition, virtual organization to enhance the agility of organiza-
2534                       A. Gunasekaran and B. Kobu

tions is gaining the attention of both researchers and practitioners. This requires
identifying optimal pathways to reengineer the business processes.

3.3. Object-oriented models
    Object-oriented models have become popular in 1990s for taking into account the
¯exibility and reuse of modelling processes. These models are ¯exible in terms of
modelling any type of manufacturing /service processes. However, they have limita-
tions, such as being di cult to understand by the user or model builder. This type of
model can only represent part of the total system and does not consider the strategic
implications or choices in the reengineering processes.
    A study by Manley (1993) describes how industrial engineers can assist in reen-
gineering worn out, error prone, or obsolescent real-time manufacturing systems by
helping computer programmers and communication engineers to ensure that critical
information control loops are complete and e cient. Two conceptual models, the
Embedded Computer System (ECS) Model and the Object Transformation Process
Model (OTPM) are used to guide a modi®ed process ¯ow analysis (PFA) of existing
large-scale, complex embedded systems. This modi®ed PFA is called Information
Process Flow Analysis.
    Hsu and Kleissner (1996) examined technology trends, business bene®ts, and
requirements. They described the logical structure of an open work¯ow system
and positions and designed ObjectFlow software to illustrate reengineering e orts.
    In a recent study, Manley (1996) presented a three-phase information system
analysis and design methodology to improve continuously enterprise information
systems as part of a six-step annual business improvement process. Following the
senior management’ s strategic decisions on next year’s product and/or service port-
folio content, the interactions between ®nancial, engineering and quality improve-
ment processes are analysed to determine the output quality and timeliness.
Concurrently, facilities, equipment, and personnel resources required for individual
processes are examined for possible immediate or future improvement. Throughout
these analyses, minimum essential information (MEI) requirements are derived using
the Object Transformation Process Model (OTPM). Individual OTPM models are
linked to help identify all pertinent data sources, information destinations, and
timing requirements. The linked OTPM models are mapped onto an Embedded
Computer System (ECS) model that de®nes a physical architecture for improving
telecommunication paths between all humans, machines and embedded computers
that are components of an integrated process. This approach yields comprehensive
logical and physical architectural models that can recursively guide high-leverage
enterprise-wide improvement projects over succeeding ®scal years. Volkner and
                                                                          È
Werners (2000) developed an object-oriented simulation decision support system
and used it for the simulation and analysis of the business processes of a municipal
printing o ce.

3.4. Integration De®nition (IDEF) models
    The development of Integration De®nition (IDEF) models for analysis of busi-
ness processes has been motivated by the desire to increase productivity by improv-
ing the communication and structure of manufacturing systems. Constructing an
IDEF model is only one component of a comprehensive process modelling e ort.
Kusiak et al. (1994) reviewed the current approaches to IDEF modelling in industry,
as well as techniques analysing IDEF models. The paper discussed the fundamentals
                            Business process reengineering                         2535

of IDEF0 and IDEF3 with an emphasis on reengineering design and manufacturing
processes. IDEF0 is a method designed to model the decisions, actions, and activities
of an organization or system. IDEF1 was designed as a method for both analysis and
communication in the establishment of requirements. The IDEF3 (Process
Description Capture Method) provides a mechanism for collecting and documenting
processes.
    Mujtaba (1994) describes practical problems encountered in modelling and simu-
lation of complex system interactions in a manufacturing enterprise. In addition to
production, the interactions of diverse activities such as sales forecasting, order
processing, production planning, material requirements planning, procurement
and distribution are considered. A graphical model of the order-to-ship (OTS)
process, which consists of the activities that occur between the receipt of orders
and the shipment of products within a factory, was built using hierarchical process
modelling (HPM), derived from IDEF0.
    Sarkis and Liles (1995) presented some issues relevant to the strategic justi®cation
of computer-integrate d enterprise technologies for small and medium-sized manu-
facturing enterprises. To address the issue of making a strategic justi®cation or
`business case’ for these technologies, among other requirements an organizational
decision-making methodology that incorporates the strategies of the ®rm is needed.
They used a research and development approach that integrates Quality Function
Deployment (QFD) and IDEF0 functional modelling to determine the requirements
and processes for the justi®cation methodology is presented. This approach has
implications for future research and development for similar organizational
decision-support processes and BPR.
    The Intelligent Bank Reengineering System (IBRS) is designed to assist a bank in
choosing and implementing the most appropriate BPR alternative. IBRS’s problem-
solving approach consists of three stages: generation, evaluation, and choice (Min
et al. 1996). In the generation stage, IBRS identi®es BPR alternatives from previous
BPR cases that are represented using IDEF. A constraint satisfaction search is
employed to identify candidate BPR alternatives that satisfy the constraints of the
bank such as goals, budget constraints, and other situational factors. IBRS evaluates
the generated BPR alternatives by work¯ow and functional economic analyses.
    IDEF models are user friendly and have the advantages of modelling the whole
system. However, it does not take into account the strategic implications in BPR.

3.5. Network models
    A methodology for mapping, measuring, tracking and managing commitments in
business processes is necessary. An organization’s network of commitments can be
depicted as a map of interconnected work¯ow loops. That map can be used as a
guide to design work processes and their supporting information technologies in
order to manage commitments for customer satisfaction and to measure productiv-
ity. A study of a complex scheduling process at George Mason University shows how
the mapping notion and the method works (Denning and Medinamora 1995).
    The BPR project management can be modelled using PERT/CPM and Flow
Charts for controlling the projects both in terms of costs and time scale. A frame-
work based on high-level Petri-nets can be used in BPR modelling and analysis. A
Petri net is a graphical and mathematical modelling tool that is able to model con-
current, asynchronous, distributed, and parallel systems. Petri nets have applications
in a number of di erent disciplines including engineering, manufacturing , business,
2536                         A. Gunasekaran and B. Kobu

chemistry, mathematics, and even within the judicial system. An approach called
`what, how and by whom’ has been developed to guide the application of the frame-
work in a BPR setting. This approach identi®es three important stages in the rede-
sign of a business process. By passing through these stages, a complete Petri-net
model of the current (As-is) or proposed (To-be) situation is obtained. Petri-net-
based models can be used to verify the correctness and to estimate the performance
of the redesigned business process (Van der Aalst and Vanhee 1996).
    There has been little research on the development of a comprehensive method to
provide full support to the analyst in the course of process modelling. Wang (1997)
proposes an approach that is a synthesis of natural language, semantic networks,
and objects. An example is used to demonstrate that the proposed approach is an
e ective method for transforming natural language descriptions into object-oriented
diagrams via the application of semantic networks. Larsen and Myers (1999)
discussed the application of Enterprise Resource Planning (ERP) in reengineering
business processes. Bhatt and Stump (2001) developed a model to examine the
interrelationship among the nature of IS networks and business process improve-
ment initiatives and found that top management support is signi®cantly related to
both IS dimensions (connectivity and ¯exibility).
    Petri-Net modelling results in more accurate modelling, taking into account the
dynamic behaviour of any practical system. However, it has limited modelling ability
for real-life reengineering situation, taking into account the complexity, and it is less
user-friendly.

3.6. Knowledge-based models
    Knowledge-based models include Arti®cial Intelligence (AI) and Expert Systems
(ES) and Database Management (DM). In order to facilitate the process of reengi-
neering by minimizing the complexity of the modelling and analysis of BPR, limited
knowledge-based models have been developed. However, this area needs further
development in order to help companies to reengineer their processes.
    Recently, many companies in China have been trying their best to transform their
central planning systems into free market economic systems. Some have used BPR to
improve their competitiveness in the global market. Xia (1995) presented a case
study for BPR in a large aircraft manufacturing company in China. The company
attempts to: (i) set up a new planning and scheduling system, (ii) change the produc-
tion planning from four levels into one level, (iii) set up a new personnel management
system, (iv) redesign the assembly process, i.e. improve the equipment and reduce the
positions from 19 to 8, and (v) design and implement the computer information
systems for supporting all redesigning activities.
    The static meta-data view of accounting databas e management is that the schema
of a database is designed before the database is populated and remains relatively
®xed over the life cycle of the system. However, the need to support the accounting
database evolution is clear: a static meta-data view of an accounting database cannot
support the next generation dynamic environment where system migration, organ-
ization reengineering and heterogeneous system interoperation are essential. Chen
et al. (1995) presented a knowledge-based approach and mechanism to support a
dynamic accounting database schema evolution in an object-based data-modelling
context.
    Yu and Mylopoulos (1996) show how distributed intentionality models and
ConGologÐa process speci®cation languageÐaid the redesign of claims processing
                             Business process reengineering                           2537

in an automobile insurance company. The models and their associated tools incor-
porate a number of AI techniques, including means-end analysis, qualitative reason-
ing, agent modelling, and theories of action.
    Ku and Shu (1996) presented a new method of retrieving cases from a case-base
using the K-tree search algorithm. Building an automated CBR (Case Based
Reengineering) system relies on representing knowledge in an appropriate form
and having e cient case retrieval methods. Using the Intelligent Business Process
Reengineering System (IBPRS) architecture as a base, they discussed a model-based
case representation approach to solve the knowledge elicitation bottleneck problems.
    Knowledge-based models are user-friendly, but have limited applications consid-
ering the areas of reengineering.


4.  A framework for BPR modelling and analysis
    The proposed framework has been presented as a checklist in table 3 to o er
some guidelines for choosing appropriate tools/techniques for BPR applications.
The guidelines are based on the areas to be reengineered for dramatic improvements
in performance.

4.1. BPR strategies
     Decision making at strategic levels would require intelligent systems to select the
appropriate strategies and methods with the objective of making decisions about
business location, product portfolio, funding for a project, etc. This requires taking
into account the risk involved and the costs and bene®ts of running the business. At
strategic levels, aggregate and fuzzy data are used to make a decision for long-term
developments and changes in an organization. The type of decisions requires experi-
ence and knowledge in selecting the most suitable methods, technologies and
strategies for BPR. Decision Support Systems (DSS), Arti®cial Intelligence (AI)
and Expert Systems (ES) can be used for making decisions at strategic levels.
However, the literature survey indicates that there are not many di erent models
designed for this purpose, but rather they are at a di erent level of applications with
narrow objectives such as new product design and development, and production
control. Therefore, there is a need for a wider use of DSS, AI and ES for modelling
and analysis of BPR strategies. It must also be noted that e-commerce has a tre-
mendous in¯uence on the reengineering business processes. If a company wants to
adapt e-commerce, then it must reengineer the whole business process with an
objective of succeeding in e-commerce. Firms can employ e-commerce as a strategy
for improving their performance through reengineering.
     The selection of tools for BPR depends upon (i) the nature of decision areas,
(ii) the nature of data to be analysed, and (iii) the background of users. The decision
area here is to formulate strategies for reengineering business processes. The nature
of data available at the strategic level is generally not accurate at this level of decision
making, and therefore models based on a systems approach and conceptual frame-
work could be used to analyse the data. Top management is responsible for this and
it can easily understan d such models and support the reengineering process.
Moreover, `Gap Analysis’ could be used in formulating strategies for reengineering
considering the critical success factors (Slack 1991). Internet and web-based tools
can be used for collecting data regarding the implications of both internal and
external factors to the organization in formulating strategies for reengineering.
2538                           A. Gunasekaran and B. Kobu

Areas to be reengineered    Tools/techniques used in BPR      Description for application

BPR strategies              Decision support system and       DSS, AI and ES can be used to
                            Knowledge-based models            select suitable strategies and
                                                              methods for reengineering
                                                              business process. This should be
                                                              based on a set of performance
                                                              measures and metrics
Business process system     Analytical models such as         They can be used for system
design                      queuing and simulations           design considering the objective
                            models                            of eliminating non-value adding
                                                              activities and focusing on value
                                                              adding activities with suitable
                                                              changes in organizational
                                                              structure, information systems
                                                              and technologies
Project management          PERT/CPM and Flow Charts          They can be used for the
                                                              implementation of various
                                                              reengineering processes
Reengineering business      Activity-based analysis and       They can be used to analyse the
process                     work¯ow model including ¯ow       business processes and identify
                            chart                             the value and non-value-adding
                                                              activities in order to achieve a
                                                              dramatic improvement in
                                                              business performance.
                                                              They can also be used for the
                                                              implementation of
                                                              reengineering business processes
Design of information       Object-oriented models and        They facilitate a ¯exible
system for reengineering    programming                       ¯exible modelling of
business process                                              organizations. This would help
                                                              to optimize the organizational
                                                              structure and information ¯ow
                                                              with the objective of reducing
                                                              the production cycle time and
                                                              hence to reengineered business
                                                              process system
Understanding of the        IDEF Models, EFQM Models,         They can be used to model
business process system     Petri-Net Models                  business processes in easy to
                                                              understand visual forms

                 Table 3.   Guidelines for selecting tools/techniques for BPR.



4.2. Process design
    The process design includes the design of a manufacturing or service system for
producing quality goods and services for the intended markets or customers. The
major tasks comprise designing the production system with suitable machines,
layout, capacity and human resources. Analytical and simulation models can be
used to study the materials ¯ow within and outside an organization. For example,
queuing and inventory models or simulation can be used for modelling the material
¯ow in a production system. This would help to decide the type of layout, capacity
level and process requirements so that non-value-addin g activities can be eliminated
                           Business process reengineering                        2539

along the supply chain. Nowadays, there are several examples of system design
software available for the design and development of manufacturing . This software
takes into account concepts such as Theory of Constraints (TOC) and Supply Chain
Management (SCM). Benchmarking is essential to develop a basis for setting per-
formance standards and process design criteria. There are numerous techniques
available (e.g. statistical analysis) for the benchmarking exercise in process design.
    For process design, tools such as queuing, or linear programming, models and
simulation can be used. In addition, simple ¯ow charts and ®sh-bone diagrams
would be useful for reengineering business processes. Business process design
begins with de®ning what is `business process’ for an organization that is under
consideration and then selects the most critical areas where business processes can
be reengineered. Benchmarking could also be used for process design with the objec-
tive of implementing best practices for eliminating di erent forms of waste. For
example, if the type of production system is a ¯ow shop, then one can go for both
simulation and analytical models. On the other hand, if the situation is a job-shop,
then one could go for simulation models. For project type production systems,
models such as CPM/PERT are appropriate.

4.3. BPR project management
    Once the reengineering strategies and methods are determined and the processes
are designed, the next step is the implementation, which requires project planning,
execution and monitoring. The project management activities can be modelled using
PERT/CPM and Flow Charts for controlling the projects both in terms of costs and
time scale. The objective of using project management techniques is to achieve
e ective implementation of the reengineering processes. Project management in
BPR requires planning, implementation and controlling. Again, the timetable for
a project execution and resource requirements should be determined with the aim of
completing the project on time with target results. Planning again needs to consider
di erent alternatives available to implement the reengineering processes. Various
trade-o s can be utilized in selecting the best alternatives that would maximize
return with minimum investment in various change e orts. Performance of the
implementation process should be measured from time to time to ensure that pro-
gress is made according to the plan.
    A business process reengineering that receives focused attention is expected to
be successful. To facilitate this, each reengineering area should be handled from a
project management perspective. In addition, reengineering requires cross-functiona l
interaction and hence project management techniques would be helpful to reengineer
any business process by eliminating functional barriers. Project management is not
only useful for managing a variety of projects, including reengineering in a most cost
e ective and e cient manner, but it is also applicable for speci®c project-based
business processes that include ship building and construction of a plant.

4.4. Reengineering
    The reengineering requires identifying the existing activities as value-adding and
non-value-addin g activities. In the past, most companies used simple techniques such
as ®sh-bone diagrams, cause±e ect relationship diagrams, activity-base d analysis
and management (ABA and ABM). These tools are highly valuable in terms of
analysing value adding or non-value-addin g activities. These techniques provide
easy understanding of the material ¯ow and, to some extent, the information ¯ow
2540                        A. Gunasekaran and B. Kobu

within and outside the organization. All the changes are aimed not to target an
incremental improvement, but a dramatic improvement in the overall business per-
formance such as market share and pro®tability. While analysing the production line
performance, one can use queuing models for determining the congestion as well as
waiting times. Equally, simulation can be used for the purpose of measuring value-
adding and non-value-addin g activities along the production line. In addition, prod-
uct-mix decisions can be made with reference to payback period, cash ¯ow, rate of
return on investment, etc.
    Once the business process is de®ned and the reengineering team is set up with the
necessary resources, the next stage is to reengineer the processes. From the business
design and strategies, the major directions and resources are determined. The next
step is then to get into the speci®cs of the reengineering processes. For this, tools
such as activity-based analysis, work¯ow models and ¯ow charts can be used for
improving activities that create wealth for customers or stakeholders.

4.5. Information system design
    The information system should follow business models. The required informa-
tion system design should be based on business objectives and methods. For the
design of management information systems, object-oriented models and program-
ming can be used as it has the required ¯exibility and it also facilitates experiments
under a di erent set of operating conditions. In addition, AI and ES can be used to
design information systems for improving materials ¯ow along the supply chain and
hence to increase overall system performance. Nowadays, e-commerce, the intranet
and internet play a major role in connecting ®rms along the supply chain and
customers. The business models should not ignore the advances in Information
Technology and Information Systems. Agent models (customers, suppliers, employ-
ers and management), as proposed by information scientists, can be used for design-
ing the information system (Powell 1994).
    Traditional organizations have used manual and paper-based information
systems, which are proved to be not so e ective in improving the communication
between people within the company and with outside parties. For an e ective engin-
eering, teamwork and accurate information ¯ow and access to the team are prere-
quisites for the success. Therefore, tools such as database (storing process
information) and enterprise resource planning systems, including MRP, CAD/
CAM, CIM, EDI, EFT and SAP, would be useful for supporting the reengineering
business processes.

4.6. Understandin g the process system
    Broad-based and simple visual tools, including animated simulation models (with
the help of computers), are suitable to explain the process system and highlight the
processes that add/do not add value to customers. Sometimes, a simple ¯ow chart
explaining the processes may motivate the employees as well as top management to
support the idea of reengineering business processes.
    There are numerous modelling techniques developed for di erent decision
making environments/situations. In general, the modelling of business processes
involves processing of information data and analysing the information ¯ow in an
organization. This makes the modelling a very complex process. Therefore, there is a
need for modelling a complex system in a more understandabl e way so that one can
develop teamwork for IDEF, EFQM (European Forum for Quality Management)
                            Business process reengineering                        2541

and Petri-net models, which have been widely employed for this purpose. The
requirement for educating and training more people who can understand the objec-
tives and methods of such complex systems is obvious.

5.   Concluding remarks
    In this paper, an attempt has been made to identify and classify the tools/tech-
niques available for modelling and analysis of BPR. Initially, we explained the role
of BPR in improving competitiveness in both manufacturing and service organiza-
tions. Following this, the de®nition of a business process was presented with the help
of a conceptual model. The importance of modelling and analysis was discussed and,
subsequently, a review of modelling and analysis of BPR was presented with the
objective of identifying appropriate modelling techniques and tools together with
some future research directions. The modelling and analysis of BPR becomes a core
part of reengineering. Modelling not only helps to plan reengineering, but also
makes implementation of necessary changes to the organization and other related
resources easier. The following are some of the future research directions in the areas
of modelling and analysis of BPR:

     . Considering the nature of information available and people participating in the
       process of formulating strategies, developing DSS, DEA, Gap Analysis, AHP,
       AI and ES for making strategic decisions for BPR is greatly justi®ed.
     . At the beginning of any business process reengineering tasks, understanding of
       the systems and identifying suitable pathways are important. This would encou-
       rage the involvement of all employees of the organization in BPR. Therefore,
       developing conceptual models for de®ning what is a business process from the
       perspective of adding value to goods/services is an important step in BPR.
     . Traditional models have always been helpful for representing business systems
       and in measuring the performanc e with the objective of selecting suitable
       strategies and methods for improving productivity and quality. Developing
       queuing, linear programming and simulation models to represent business
       processes and then selecting the optimal business process system facilitates
       adding value to customers with minimum investment.
     . Reengineering relies more on eliminating non-value-addin g activities.
       Therefore, activity-based analysis based on activity-based costing (ABC) can
       be used to identify the value-adding and non-value-addin g activities
       (Tatsiopoulos and Panayiotou 2000).
     . Reengineering virtual organizations requires a di erent approach and tools for
       modelling and analysis. For example, the information ¯ow model will become
       a predominant tool. In this situation, there is a need to model the system with
       the help of object-oriented modelling techniques and programming.
     . Organization s lack project planning and management due to resource and
       other organizational constraints . Hence, the more e ective use of project
       management techniques (CPM/PERT) is the best tool for successfully imple-
       menting BPR strategies and methods. Suitable performance metrics and
       measures should be considered for the purpose of monitoring the reengineering
       projects.
     . Powerful computers facilitate simulation models. Models such as IDEF and
       EFQM and Petri-nets can be used for understanding the business processes
       together with optimizing the use information across the supply chain.
2542                          A. Gunasekaran and B. Kobu

   . The operating environment of current manufacturing /services has changed the
     perspective of globalization and the application of Information Technology.
     Considering these, models need to be developed employing e-commerce,
     e-manufacturin g and e-service environments.
   . Suitable modelling techniques have to be identi®ed to facilitate the modelling
     of virtual organizations or physically distributed organizations with the objec-
     tive of reengineering the process in such environments. For example, Petri-nets
     and object-oriented models would be helpful in reengineering business
     processes.
   . Modelling tools should easily be understandable and ¯exible so that process
     mapping and benchmarking can be carried out in a more visual manner for an
     e ective reengineering business process. The internet and WWW can be used
     for benchmarking business processes, including partnerships with other world
     class companies.



Acknowledgements
   The authors are grateful to two anonymou s referees and the editor for their
constructive and extremely useful comments on an earlier version of the manuscript,
which considerably helped to improve the presentation of the paper.


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